The major objective of this project is to uncover the enzymatic steps involved in various genetic rearrangement reactions and to study the mechanism of action of the enzymes involved. We are currently concentrating our efforts on the mechanism of the transposition-replication reaction of bacteriophage Mu. Recent developments include the establishment of an in vitro reaction system for the study of replicative transposition of bacteriophage Mu. This in vitro reaction yields cointegrate products as well as simple insertion products and requires both the A and B gene products of phage Mu along with other bacterial proteins. By making use of this cell-free reaction system, we have been able to divide the transposition reaction into two separate steps. (1) The first step involves a pair of DNA strand transfer reactions which generate an intermediate DNA molecule. The structure of this intermediate has been determined. The formation of the intermediate can be carried out by three purified protein factors; Mu A, Mu B and E. coli HU proteins. The Mu A protein binds to the Mu end DNA sequence specifically. The Mu B protein possesses an ATPase activity which is stimulated by Mu A protein and DNA. The reaction requires a transposon donor molecule which has two Mu end sequences in their proper relative orientation and is negatively supercoiled, while the transposition target DNA can be in relaxed form. Evidence was obtained which indicates that recognition of the relative orientation of two Mu end DNA sequences makes use of the energy of DNA supercoiling and requires a specific geometry of the DNA segments within the synaptic complex. (2) intermediate DNA molecules can be converted into cointegrates by DNA replication or into simple inserts by nucleolytic cleavages and repair, in a second reaction, by an E. coli extract without Mu proteins.